Rise Up Economics is a progressive plan to ensure economic security by providing a basic income to all Americans. It will stimulate the economy, eliminate poverty, protect the middle class, and help change work as we know it.

Friday, January 14, 2011

Middle Class is Dying, and How We Can Save It

Today's Washington Post profiles people who have dropped right out of the middle class:

The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.

The middle class has been dying for decades, due to globalization and the attack on unions. But the Great Recession has accelerated that process to the point where one has to wonder: can we save the middle class in America?

I propose 4 Steps to Save the Middle Class that amount to a coherent progressive economic vision: Rise Up Economics.

Step 1: The government must create millions of good middle class jobs. According to a new report from the Economic Policy Institute, there are almost 6 officially unemployed workers per available job. There's just not enough jobs out there. And if we've learned one thing from the recession, it's that we can't count on businesses to provide the jobs we need. It's up to the government to proactively create good jobs--there's no shortage of things that need to be built or repaired or cleaned, or children to be educated.

If President Obama had used all of the stimulus money on creating permanent, high-quality government jobs, our economy would be in much better shape right now. He can fix his mistake by campaigning for real job creation now. Instead state and local governments are laying off teachers and firefighters. We need to turn this around.

Step 2: Give workers the power to make low-wage service sector jobs into good middle class jobs. The service sector makes up 40% of all jobs now, and will be 95% of all new jobs over the next 10 years. If these don't become good middle class jobs, there will be no middle class in America.

Manufacturing jobs used to be bad jobs, with child labor, 14-hour days, filthy conditions. But workers joined together to fight for their rights, and with the passing of the Wagner Act, they united in huge numbers to transform factory work into good middle class jobs.

We need new labor laws to allow service workers to unite without fear that their employer, whether it's Walmart or Wendy's, Target or Taco Bell, will fire them or cut their hours. These big employers are making record profits during this recession--but it's their employees doing all the hard work to make those profits possible. They need to share those profits with their workers by sitting down at the table and bargaining a contract with them.

Step 3: Enact fair trade policies that ensure higher working standards across the globe. We can't hope for good middle class jobs here when corporations can move those jobs to places with deplorable labor standards. That means a real crackdown on below-poverty wages and child labor in China and Malaysia and wherever capital flows.

Step 4: Create a basic income for all. Our current jobs crisis highlights the tragic flaw in our economy: we all need jobs, but they don't need us. We are too reliant on jobs as our only source of income, making work an all-or-nothing endeavor with very high stakes for ourselves and our families.

With the first three steps we can create some jobs and make some jobs better and create incentives for businesses to provide good jobs, but we can't make a business create jobs if it's not in their interest to do so. As technology improves, there will be more and more work that can be done without employing human beings--yet we still have an economy where everyone has to work at least 40 hours to survive (except the rich few).

Work dominates American life in a way that no other institution besides family does. We spend more than half our waking hours working or commuting to/from work. Some have a good job and are married to it and afraid of losing it. Some have bad jobs and need two or three of them to make ends meet. Many families have multiple people working multiple jobs just to pay the bills. And then of course there's the many many millions who are unemployed.

We need to take work down a notch or two by not having to need it so much.

If every worker had a basic, just-above-poverty level income to start out with, independent from jobs and work, then the need to work would be a little less desperate.

Providing working people with $12,000 a year--$1,000 a month--would truly stimulate the economy and create millions of jobs while providing the kind of economic security that is so clearly lacking now.

For the unemployed it would mean replacing unemployment benefits with income that doesn't run out and doesn't go away if you work. Similarly, for the poor on welfare and foodstamps it means replacing those programs with a basic income that they can always count on and won't lose if they take a $10 an hour job. We could finally stop paying people to not work.

For the working poor it would mean a real safety net that would allow them to work a little less and spend more time with their families if they wanted, or a real boost into the middle class, with newfound opportunities to go to school or get new training.

For the shrinking middle class it would provide stability and economic security and a way to step on the brakes on the great slide out of the middle class. The money could be used for education or investment or simply to spend to stimulate the economy.

By taxing the rich and the Wall St. bankers and oil companies etc. and giving to the rest of us, we can make work a much less depressing situation and remake our economy so that it works for all of us, not just the folks at the top.